“While the growth of communist economies was the subject of innumerable alarmist books and polemical articles in the 1950s, some economists who looked seriously at the roots of that growth were putting together a picture that differed substantially from most popular assumptions. Communist growth rates were certainly impressive, but not magical. The rapid growth in output could be fully explained by rapid growth in inputs: expansion of employment, increases in education levels, and, above all, massive investment in physical capital. Once those inputs were taken into account, the growth in output was unsurprising – or, to put it differently, the big surprise about Soviet growth was that when closely examined it posed no mystery. This economic analysis had two crucial implications. First, most of the speculation about the superiority of the communist system – including the popular view that Western economies could painlessly accelerate their own growth by borrowing some aspects of that system – was off base. Rapid Soviet economic growth was based entirely on one attribute: the willingness to save, to sacrifice current consumption for the sake of future production. The communist example offered no hint of a free lunch. Second, the economic analysis of communist countries’ growth implied some future limits to their industrial expansion – in other words, implied that a naive projection of their past growth rates into the future was likely to greatly overstate their real prospects. Economic growth that is based on expansion of inputs, rather than on growth in output per unit of input, is inevitably subject to diminishing returns. It was simply not possible for the Soviet economies to sustain the rates of growth of labor force participation, average education levels, and above all the physical capital stock that had prevailed in previous years. Communist growth would predictably slow down, perhaps drastically.”

]]>
By: Philip Brzezinski https://gowans.wordpress.com/2012/12/21/do-publicly-owned-planned-economies-work/#comment-13320
Sun, 20 Mar 2016 00:44:46 +0000http://gowans.wordpress.com/?p=1852#comment-13320Growing up and seeing those pictures of people waiting in line for food, I wondered if they were REALLY Russians (as we were told) or just Americans at the neighborhood soup kitchen…
]]>
By: sascha313 https://gowans.wordpress.com/2012/12/21/do-publicly-owned-planned-economies-work/#comment-13036
Thu, 07 Jan 2016 07:31:38 +0000http://gowans.wordpress.com/?p=1852#comment-13036I agree to you. We could quite exactly see through the person of Michail Gorbachev in the GDR. If one reads up his statements till this day, one can see that Gorbachov always an anti-Communist. He has many bowls – like an onion. Very clearly this has also analysed the historian Dr. Kurt Gossweiler. His noteworthy article has also appeared in Spanish. I do not know whether there is an English translation. But it could explain the “riddle” of the Gorbimania.

Confidence in socialism: A look at the achievements and setbacks
This year marks twenty-five years since Mikhail Gorbachev resigned as the USSR’s last president and declared the birth of a “new world.”
But his promised society of universal human values and a peace dividend are nowhere in sight.
The wheels are falling off the global capitalist economy and imperialism is preparing wars that make Hitler look like an amateur.
If you’d like to grasp why the situation is so dire, why change is in the air and why change is needed, Stephen Gowans’ article (link appended) is a superb place to start reading.
Gowans is better at defending socialist economics than explaining revolutionary change, but he covers a lot of territory.
He sees socialism as “a future free from unemployment, recessions, extremes of wealth and poverty, and where essential goods and services are available at no cost to all.”

* * * *
Gowans has two main ideas in his article:
“It is time to tear down the wall of politically engineered misconceptions about public ownership and planning.”
And: “For the Soviets, the Cold War was economic poison. For the Americans, the Cold War was a way to ruin the Soviet economy.”
Gowans defends public ownership very well. But about the Cold War confrontation, whose main feature was an expensive and increasingly dangerous arms race, I have to question Gowans’ claim that the Soviet Union had to strive for military parity with the imperialist world.
We need to remember Frederick Engels’ advice that confronting capitalists is firstly a political struggle.

* * * *
Gowans’ article is excellent about socialism: its real achievements by and for workers, the need for peace, economic growth, social rights and so on.
It is a rare article that sums up the key realities of both capitalism and socialism.
Reading it is time well spent.
Gowans is a thousand times right about the incalculably tragic and dangerous outcome of the setbacks to socialism twenty five years ago.
I believe they are worse than he portrays them, militarily.
The setbacks are the direct cause of worsening conditions of workers globally.
Most importantly, they gave the capitalist world the liberty to prepare a new war among the world’s largest nations – another world war, this time with powerful nuclear weapons.
The NATO alliance’s military build-up against Russia and the U.S. pivot of nuclear-equipped naval forces against China are paving the road to Armageddon.
The latter point about a world war is not mentioned by Gowans. He correctly mentions imperialism’s growing predation of less developed and socialist countries since 1991 – Iraq, Yugoslavia, Libya, Syria and so on.
Gowans reminds us that on the day the Soviet Union ended (Dec. 25, 1991), Gorbachev said, “We live in a new world. The Cold War is finished. The arms race and the mad militarization of states, which deformed our economy, society and values, have been stopped. The threat of world war has been lifted.”
Gorbachev mutilated the basic socialist truth that war is an inherent feature of capitalism, especially in its highest, imperialist stage.
Gowans does not mention this, but the facts he relates imply it. He states Gorbachev surrendered to the U.S., but really he surrendered to capitalism and betrayed socialism.
Gorbachev also strayed from Marxism by asserting his declared new world would run on principles of ‘universal human values.’
Gowans mentions this point in passing, emphasizing the external danger to socialism as the reason for the setbacks. But the ideological rot under Gorbachev was more serious than Gowans’ description, as “honeyed phrases” and “rhetoric.”
They were words intended to overthrow working class power, overturn socialism and embrace capitalism.
A horde of ravenous crooks in the Soviet Union took full advantage of Gorbachev’s departures from Marxism.
It did not take long for Gorbachev’s mistaken and deceptive bubble of “universal values” to burst: The entire world became a luxury resort for the one percent and a nightmare for working people.
People like Gorbachev profited greatly by betraying socialism, but workers in Russia paid a tragic cost in living and health standards.
The capitalists in charge of Russia and the world economy never had the ability or any intention to keep Gorbachev’s promises.
Only a classless, communist society could achieve Gorbachev’s promise of universal values on a world scale.
Gorbachev popularized the old, unscientific theory of “convergence” of capitalism with socialism, a theory promoted by capitalist ideologists in the 1970s and exposed by Soviet Marxists at the time. The theory promoted the entirely false idea that capitalism is no longer dangerous, corrupt and exploitative.
Overly impressed by the gigantic movement for nuclear disarmament and a minor U.S.-Soviet disarmament treaty in 1987, most Marxists failed to combat Gorbachev’s convergence theory.

* * * *
An issue not addressed by Gowans is: Did the USSR make a strategic error (fall into a trap) of trying to achieve military parity with the USA, a goal declared in the 1970s?(1)
Gowans makes the important point that socialist countries had to industrialize quickly and massively to provide the material basis for a strong military defence against imperialist threats and invasions (1918-1921; 1941-1945).
In this deadly stand-off, the environment suffered along with workers who shouldered the cost of the arms build-ups.
Lenin pointed out that the early Soviet republic survived when it was vastly weaker militarily than the invading imperialist countries. It survived because it had the enormous sympathy and active solidarity of the world’s workers.
It is because of this that I question Gowans’ fatalistic conclusion that “If it did not try to keep pace (with military spending – DR), it could no longer deter US aggression. No matter which way Moscow turned, the outcome would be the same. The only difference was how long it would take the inevitable to play out.”
In a nuclear stand-off, setting a goal of military parity (to me) had the effect of downplaying the need for a political solution.
A less rigid strategy was for the USSR to follow Engels’ advice in 1891: “You shoot first, messieurs les bourgeois” and to let capitalism bankrupt itself. In other words, don’t play the game offered by capitalism.
Stalin himself may have followed Engels’ advice by seemingly ignoring Nazi Germany’s preparations to invade in 1941. His worst error may have been leaving too many soldiers close to the frontier and without proper communication.
Gowans correctly dates the official start of U.S. imperialism’s drive for military superiority to president Reagan’s 1983 declaration of an “offensive for freedom.” But detente was already stalled in Carter’s last years.
Led by the U.S., the imperialist world has been preparing for military superiority and confrontation since at least 1983.
This is why Russia, China and all fast-developing countries are under pressure to spend more money on arms.
Socialism offers the only hope to avoid another major war, improve conditions for working people – the 99 percent – and prevent environmental collapse.
The capitalist menace must be overcome.

]]>
By: Do Publicly Owned, Planned Economies Work? | what’s left | Political Reality https://gowans.wordpress.com/2012/12/21/do-publicly-owned-planned-economies-work/#comment-12621
Mon, 19 Oct 2015 22:41:50 +0000http://gowans.wordpress.com/?p=1852#comment-12621[…] Source: Do Publicly Owned, Planned Economies Work? | what’s left […]
]]>
By: jiminykrix https://gowans.wordpress.com/2012/12/21/do-publicly-owned-planned-economies-work/#comment-12600
Tue, 13 Oct 2015 17:56:20 +0000http://gowans.wordpress.com/?p=1852#comment-12600[…] What are we to make of the fact that the Soviet Union provided full employment, guaranteed pensions, paid maternity leave, limits on working hours, free healthcare and education (including higher education), subsidized vacations, inexpensive housing, low-cost childcare, and subsidized public transportation for the majority of its existence? (https://gowans.wordpress.com/2012/12/21/do-publicly-owned-planned-economies-work/) […]
]]>
By: Black_Rose https://gowans.wordpress.com/2012/12/21/do-publicly-owned-planned-economies-work/#comment-12286
Sun, 14 Jun 2015 21:09:25 +0000http://gowans.wordpress.com/?p=1852#comment-12286It also makes one wonder whether the “crisis of capitalism” of 2007-08 was more dire for capitalism compared to the stagflation of the 70s. Would the earlier 90s recession or the Dot-com collapse count as “crises” of capitalism. Perhaps some elements of the Austrian Business Cycle has some merits, even if it omits critical social and cultural details about the relevant economy; the United States utilized a lax monetary policy to inflate the equity and real estate markets, causing some sectors of the economy to flourish, but the frenzy of “malinvestment” could not be sustained because the return of the assets would not be enough to sustain asset price when credit expansion ceased. Such “malinvestment” could only be maintained during a vicious cycle that provides an increase in economic activity and an increase in security prices. In other words, in order for capitalism to address its inherent deficiencies in providing material prosperity and security to works absent of social welfare programs funded by high fiscal spending, the economy had to be stimulated through monetary means, and this excess source of funds would be allocated in sectors that have little prospect of ultimately remunerating one’s investment. Also, crisis could be forestalled by using the same lax monetary policies in order to inflate another bubble.

It did not seem that there was enough “malinvestment” for the US to experience a crisis of capitalism during the 80s. Nor did the working class’ economic position was severely compromised then (although the power of unions were being eroded) before the collapse of the USSR, since the influx of additional workers in the global labor force occurred when capital became more mobile and free trade deals rendered well-compensated domestic employment as too costly.
—

I am not at all convinced it was entirely “revisionism” that brought the Soviet Union down, but I am convinced that had Stalin lived five more years, thing would have been better. Brezhnev did not address a culture of corruption within the USSR, but Yuri Andropov was a genuine Marxist-Leninist. Too bad Andropov had renal failure, perhaps he might have prevented the Soviet Union’s collapse if he had 10 more years. Other questions arise concern what would history have been if Henry Wallace instead of Dwight Eisenhower became president, or (even if it unlikely) Walter Mondale over Ronald Reagan?

I wished the Soviet Union survived, so that its citizens would be able to experience a “crisis of capitalism” and have an opportunity to express their gratitude (relative to the citizens of Greece) when it finally manifested. It is also lamentable that there needed to be some schadenfreude in order for many to appreciate the merits of a socialist economy and see that the apparent “shared prosperity” of capitalism is ultimately an illusion, but that is certainly better than having them experience it themselves and having the institutions of the Soviet state scuttled and dismantled.

I am still convinced that Marxism-Leninism is the most progressive force this world has ever known! Marxism-Leninism is not just an idea or philosophy.
—

Gowans, I would suggest to enable comments again for your new posts, or perhaps there were too many troll comments and spam to moderate and delete. Your writing truly is a treasure, and it would be preferable if people can discuss the issues in good faith!

Does anyone have an opinion on this Joseph Ball essay? The gist is, after Stalin died, the USSR gave up on its system of subsidies for innovation, instead incorporating more market-based incentives. However, since they were still operating on a plan, this prevented the endogenous incentives that would have arisen under a full capitalist regime. So, from ~1955 onward, they had the weaknesses of both systems and the strengths of neither, as far as technological innovation was concerned. The impact of this was minor at first but in the ensuing decades became ever more onerous. Further, there is some speculation that some of the drive for market-based reforms was due to an underdeveloped analysis of imperialism, as the higher Western living standards may not have been associated with the systemic impoverishment of client states.

It seems on its face to be a sensible point, consonant with other things I’ve read. Has this idea been interrogated more thoroughly anywhere?